January 2020: Small Claims Court Damages Increased

Starting January 1, 2020, the monetary jurisdiction in the Ontario Small Claims Court, has been increased from $25,000.00 to $35,000.00 under O. Reg. 626/00. This means that all new civil actions based only on damages of or below $35,000.00 must be commenced within Small Claims Court.

But did you know that the increase in the monetary jurisdiction is likely retroactive, and the increase may apply to most active cases in Small Claims Court? This was decided in established jurisprudence, with Fast Money ATM Inc. v Inkas Security Services Ltd.[1] being one of the latest decisions. In Fast Money, Prattas D.J. reaffirmed that a change in the monetary jurisdiction of the Small Claims Court is a change in the method of enforcing an existing right, and is therefore a procedural change.[2] Since it is a principle of statutory interpretation that amendments to procedural rights are retroactive; this means that the increase in the monetary jurisdiction to $35,000.00 is retroactive as well, and applies to all active cases today.  

For existing cases, the increase to damages of $35,000.00 is not automatic, nor is it guaranteed. A plaintiff must seek the amendment under Rule 12 of the Rules of the Small Claims Court, O. Reg. 258/98. Not all claims will necessarily be granted the amendment, as the test to amend looks at whether a defendant suffers prejudice as a result of the amendment. This is why we recommend that as a plaintiff, any amendments to increase the damages claim to $35,000.00 should be notified to the defendant as early as possible and in advance of trial, to mitigate any prejudice to the defendant and provide fair notice.

Likewise, this also means that condominium corporations who are defendants in a Small Claims actions should be aware that their risk exposure has potentially increased to $35,000.00 starting from January 1, 2020. We recommend that Boards of Directors take this into consideration when devising their litigation and settlement strategy.